January 28, 2019

EU Threatens Retaliation If U.S. Imposes Auto Tariffs

U.S. President Donald Trump has threatened to use his Section 232 trade powers to impose tariffs on imports of automobiles and automobile parts. Last week, Jean-Luc Demarty, director general for trade in the European Commission, explained the European Union would retaliate if the president takes that action, imposing $22.7 billion in tariffs on U.S. imports.

According to Fortune, Demarty said, “We have prepared a draft list of imports from the U.S. to the value of 20 billion euros on which re-balancing action could be taken.”

While European Trade Commissioner Cecilia Malmstrom also made it clear that the EU would retaliate if President Trump imposes new penalties, she predicted last week that the U.S. commander in chief actually wouldn’t make good on his threat. Reuters reported that, at the World Economic Meeting last week in Davos, Malmstrom said, “We’re advancing, we have made some very important progress there and there’s a process that is positive, I think, and it said also that we would not impose tariffs on each other.”